Pioneer Distilleries Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 28th Annual Report of your Company and the audited nancial statements for the year ended March 31, 2021.

FINANCIAL RESULTS

The Summary of Financial Performance of the Company for the year 2020-21 is as under:

Particulars 2020-21 2019-20
Gross sales 15,794 15,840
Add: Other operating revenue 946 1,314
Add: Other income 301 310
Total Income 17,041 17,464
Less: Cost of goods sold 13,309 13,699
Less: Other costs 5,596 5,152
Earnings (Loss) before government grant, depreciation, interest and taxes (1,864) (1,387)
Add / (Less) : Government grant (266) 524
Earnings (Loss) before depreciation, interest and taxes (2,130) (863)
Less: Interest costs 3,213 3,359
Less: Depreciation 3,314 4,690
Earnings (Loss) before taxes (8,657) (8,912)
Income tax expenses - 6,007
Other comprehensive income (Net of tax) (80) 34
Pro t / (loss) available for appropriation (8,737) (14,885)

DIVIDEND

In view of the accumulated losses, your Directors do not recommend any Dividend on the equity shares of the Company.

TRANSFER TO RESERVE

During the year under review, there was no amount transferred to reserves of the Company.

BOARD MEETINGS

During the year under review, Five Board Meetings were held. The details of the same are covered in the Corporate Governance Report.

STATE OF COMPANYS AFFAIRS

The net worth of the Company has eroded and the current liabilities exceed the current assets as at the year-end. However, the Management and the Board of Directors have reviewed the cash ow forecast for the next twelve months and based on the letter of nancial support obtained from United Spirits Limited, the holding company, have concluded that there is no material uncertainty on the ability of the Company to continue as a going concern.

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

Except to the extent as stated under material changes and commitments, there have been no signi cant or material orders passed during the year by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future.

PERFORMANCE OF THE COMPANY

The Company has achieved a gross - sales of INR 15,794 Lakhs for the nancial year ended March 31, 2021 against the gross sales of INR 15,840 Lakhs for the nancial year ended March 31, 2020. The Company has reported a loss of INR 8,657 Lakhs before tax due to intermittent plant stoppage for major overhauling carried out in plant and certain challenges leading to delay in stabilization of operations.

DEPOSITORY SYSTEM

The trading in the equity shares of your Company is under compulsory dematerialization mode. As on March 31, 2021, equity shares representing 97.81% of the equity share capital are in dematerialization form. As the depository system o ers numerous advantages, members are requested to take advantage of the same and avail of the facility of dematerialization of the Companys shares.

Members may please note that e ective 1st April 2019, shares of the listed entity can be traded only in dematerialized mode pursuant to SEBI noti cation SEBI/LAD-NRO/GN/2018/24 published on 08 June 2018.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of the Companies Act, 2013 (the Act), Ms. Mamta Sundara shall retire by rotation and, being eligible, o ered herself for re-appointment.

During the year, Mr. Ravi Varma Pakalapati, Managing Director of the company has resigned from the position of Managing Director and Director with e ect from 1st July 2020 due to personal reasons and the company after recommendation by the Nomination and Remuneration Committee has appointed Mr. Alokesh Biswas as an additional director and Managing Director with e ect from 1st July 2020. Further Mr. Alokesh Biswass appointment as an additional director and as Managing Director were approved at the Annual General Meeting held on 29th September 2020.

Mr. R. Krishnamurthy, Independent Director of the company whose tenure expired on 12th July 2020, has been reappointed for a further period of three years at the Annual General Meeting held on 29th September 2020.

Mr Ajay Kumar Goel, Director had tendered his resignation to the position of Director with e ect from 17th March 2021 due to personal reasons. The resultant vacancy was lled by the Board of Directors by appointing Mr Gopal Kothari as a Director with e ect from 17th March 2021 subject to approval of the members of the Company. The Nomination and Remuneration Committee has recommended the appointment of Mr. Gopal Kothari.

Brief pro le of the directors being re-appointed/appointed, are provided in the Notice convening this Annual General Meeting (AGM) .

As per the declarations received, no Director of the Company is disquali ed to be appointed as a Director of any Public Limited Company in terms of Section 164(2) of the Companies Act, 2013.

INDEPENDENT DIRECTORS

Your Company did not appoint any new Independent Director or Nominee Director in the nancial year 2020-21. Criteria for selection/appointment or reappointment of Independent Directors include skills, expertise of the Director, quali cations, experience and domain knowledge. The required skills of Independent Directors are leadership, managerial experience, diversity, risk management and corporate governance. All our Independent Directors viz., Mr. R Krishnamurthy and Ms. Srivathsala K N possess the aforesaid skills.

DECLARATION FROM INDEPENDENT DIRECTORS

In terms of Section 149(7) of the Companies Act, 2013, Independent Director(s) of the Company have submitted a declaration that they meet the criteria of Independence.

DIRECTORS APPOINTMENT AND REMUNERATION POLICY

In CGR The Nomination and Remuneration Committee (NRC) reserves the right to review the Policy on Directors or Senior Appointments from time to time and make suitable modi cations, subject to approval of the Board. This Policy on Senior Appointment shall be subject to the provisions of the Companies Act, 2013 and the rules made thereunder. The policy is placed on the website of the company at https://pioneerdistilleries.com/InvestorRelations/Policy%20on%20Directors-Senior%20appointments.pdf

As stated in the Corporate Governance Report, sitting fees were paid to Independent Directors for attending Board/Committee meetings. They are also entitled for reimbursement of actual travel expenses, boarding and lodging, conveyance and incidental expenses incurred in attending such meetings.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and rules made thereunder and Regulation 17 of the Securities and Exchange Board of India (Listing obligations & disclosure requirements) Regulations, 2015 ("SEBI Listing Regulations") the Board has been carrying out an annual performance evaluation of its own performance, the performance of its Directors individually, as well as that of the Board Committees. The evaluation process considers the e ectiveness of the Board and the Committees with special emphasis on the performance and functioning of the Board and the Committees. The evaluation of the Directors is based on the time spent by each of the Board Members, core competencies, expertise and contribution to the e ectiveness and functioning of the Board and the Committees.

MATERIAL CHANGES AND COMMITMENTS

The Company had on 26th November 2019 received directions from Maharashtra Pollution Control Board under section 33A of the Water (Prevention & Control of Pollution) Act, 1974 and under section 31 A of the Air (Prevention and Control of Pollution) Act, 1981 alleging pollution caused by the company and complaint received through Central Pollution Control Board in July 2019 .

The company had submitted reply with bank guarantee of 5 Lakh dated 2nd Jan 2020 and other completion report which was completed before November 2018 and was submitted through letter dated 12th Dec 2018. Company had disconnected and utilized all available water and emptied out the pond and submitted status report accordingly on 25th March 2021. High Density Poly Ethylene (HDPE) lining work to partial pond is in progress.

A suo moto case has been led by district sessions court, Nirmal against the company based on the article published in the Local newspaper. After regular hearings in the Nirmal court, the company has led its a divit and submitted reply to the Court. The matter is sub-judice.

The water board has substantially increased the tari on water and changed the jurisdiction from Revenue department to Maharashtra Water Resources Regulatory Authority thereby giving the control of supply and collection of charges towards consumption to Water Resources Department. Looking at the substantial hike and impact, the company had approached high court to avoid any hostile actions such as stopping the water supply. After obtaining a stay order in favour of the company we have approached the Primary Dispute Resolution O cer questioning the increase in water tari and to prove water source as a partly assured water supply and water consumption in the distillery as a process water. The matter is pending with the Primary Dispute Resolution O cer.

The Management Discussion and Analysis Report read with the report on Risk Management contains impact on the business due to regulatory changes and due to recent COVID-19 Pandemic.

COMMITTEES

The Companies Act, 2013 provides for the formation and duties of various committees of the Board. The Company has in place the required Committees with speci c de ned roles, duties and responsibilities. Details of various committees, meetings held and attendance at the various committee meetings are given in the Corporate Governance Report which forms part of the Annual Report.

All the recommendations of the Committees were accepted by the Board.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There are no loans given, investments made, guarantees given, securities provided by the Company and acquired by way of subscription, purchase or otherwise securities of any other body corporate which are covered under the provisions of the Section 186 of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROLS

Your Company has established and maintained a framework of Internal Financial Controls and compliance systems. Based on Boards review of the e ectiveness of the policies and procedures adopted by the Company for ensuring orderly and e cient conduct of its business, including adherence to Companys policy, safeguarding its assets, prevention and detection of frauds and errors and completeness of accounting records and timely preparation of nancial statements and the con rmation received from the external parties, the Board has satis ed itself that the Company has laid down internal nancial controls, commensurate with size of the Company and that such internal nancial controls are broadly adequate and are operating e ectively. The certi cation by the auditors on internal nancial control forms part of the audit report.

AUDITORS

M/s. Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E-300009), were appointed as Statutory Auditors of your Company in the 24th AGM held on 28 July 2017 for a period of 5 years till the conclusion of the 29th AGM of the Company. Pursuant to provisions of the Companies (Amendment) Act 2017, rati cation of the appointment made at the earlier Annual General Meeting is not required and hence dispensed with rati cation of the appointment of Auditors. The report issued by the Statutory Auditors during the year does not contain any quali cation, reservation or adverse remarks or disclaimer.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Sudhir V. Hulyalkar, a Company Secretary in Practice (FCS: 6040) (CP No. 6137) to undertake the Secretarial Audit of the Company for the Financial Year 2020-21. The Secretarial Audit Report is given as Annexure 2, forming part of this Report. The report issued by the Secretarial Auditor during the year does not contain any quali cation, reservation or adverse remarks or disclaimer.

In addition, pursuant to Regulation 24A of the SEBI Listing Regulations, the Secretarial

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Compliance Report for the nancial year ended March 31, 2021, in relation to compliance of all applicable SEBI Regulations/circulars/guidelines issued thereunder, has been submitted to the s t o c k e x c h a n g e s a n d i s a l s o a v a i l a b l e o n t h e C o m p a n y s w e b s i t e a t https://pioneerdistilleries.com/InvestorRelations/PDL_Annual_Secretarial_Complinace_Report_2021.pdf as stipulated under the said Regulation.

RISK MANAGEMENT

The Company has a Risk Management framework. Risk evaluation by the management is an ongoing process within the organization and is periodically reviewed by the Board of Directors. Risk Management has been made part of Audit Committee by renaming the Audit Committee as Audit and Risk Management Committee. The Risk Management policy adopted by the Company has been explained in the Management Discussion and Analysis Report which forms part of this Annual Report.

WHISTLE BLOWER MECHANISM

The Company has adopted a whistle-blower mechanism known as SpeakUp, which is independently operated by a third-party agency. We encourage our employees or representatives acting on behalf of the Company, to raise their compliance concerns through this mechanism, apart from other internal reporting channels viz. Line Manager or HR Business Partner, Legal Business Partner and Business Integrity partner. A structured Breach Management Standard is in place which is in line with the Global Standard, for timely and conclusive resolution of compliance concerns raised through the whistle blower mechanism.

The quality of investigation reports and remedial actions are reviewed and monitored by the Global Business Integrity team. The decision on sanctions on the reported breaches are determined and monitored by a Compliance Committee, in order to ensure that there is a collective and a fair decision-making process and consistent action is undertaken in resolving the breaches.

This mechanism also provides for adequate safeguards against the victimization of employees who avail the vigil mechanism for reporting the compliance complaint in good faith and without fear of being punished for raising that concern. Access to the Chairman of the Audit Committee is provided as required under the Companies Act, 2013 and the SEBI Listing Regulations.

The SpeakUp channel is available at https://www.diageoindia.com/about-us/corporate-governance/speak-up/, and the Toll-Free number is available in English and other prominent regional languages.

During the nancial year 2020-21, 3 (three) cases have been reported through SpeakUp and other internal reporting channels. All cases have been investigated and resolved with substantiation rate of 33%.

As a part of the governance framework, the Board of Directors and the Audit Committee regularly review the strategy and operation of the compliance and ethics programme including the breaches reported, throughout the year. Regular updates are also provided to the senior leadership team on various aspects of the compliance program, not only to set the tone at the top but also as a part of managements commitment to continuous improvement in integrating compliance with the business.

RELATED PARTY TRANSACTIONS

The Company has formulated a Policy on dealing with Related Party Transactions (RPTs) which has been reviewed by the Audit Committee at regular intervals. The Policy is disclosed on the website of the Company at http://www.pioneerdistilleries.com/policies.php. All transactions entered with Related Parties as de ned under the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations during the year were in the ordinary course of business and at an arms length basis. There are no materially signi cant RPTs entered by the Company with promoters, directors, key managerial personnel or other designated persons which may have a potential con ict of interest with the Company.

The details of the RPTs in Form AOC-2 is enclosed and marked as Annexure 3. In accordance with Ind AS 24, the RPTs are disclosed under Note 35 of the Financial Statements.

CORPORATE GOVERNANCE REPORT

A report on the Corporate Governance is annexed separately as part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report is annexed separately as part of this report.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year. There was no xed deposit amount that remained unpaid/unclaimed as at the end of the year.

LISTING OF EQUITY SHARES OF THE COMPANY

The Equity Shares of your Company continue to be listed with BSE Limited and National Stock Exchange of India Limited. The Annual Listing fees for the year 2020-21 have been paid to these Stock Exchanges.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 which were applicable with e ect from September 07, 2016, the unclaimed/unpaid dividend remaining unclaimed/unpaid for a period of seven years, have been transferred to the IEPF. There were no amount pending to be transferred to the IEPF account for the nancial year ended March 31, 2021.

Necessary compliance under Rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012 have been complied with.

HUMAN RESOURCES

The ratio of the remuneration of each director to the median employees remuneration, the names of the top ten employees in terms of remuneration drawn and other details during the nancial year 2020-21 in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) & (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure 1 and also in the Corporate Governance Report, which forms part of this report. None of the employee draws remuneration in excess of the limit prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Report of the Directors

EMPLOYEES STOCK OPTION SCHEME

Your Company has not o ered any stock options to its employees during the year 2020-21 within the meaning of SEBI (Share Based Employee Bene ts) Bene ts Regulations, 2014.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to Energy conservation, Technology absorption, Foreign exchange earnings and outgo, as required to be disclosed under the Act is given in Annexure 4 to this Report.

THE ANNUAL RETURN

The draft Annual Return of the Company as on March 31, 2021 in E- Form MGT - 7 in accordance with section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://pioneerdistilleries.com/InvestorRelations/PDL_MGT.pdf.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) committee has been setup by the Company. The composition and other details have been provided in the Corporate Governance Report.

The Company and its employees have actively participated in engaging with stakeholders and regulatory authorities so as to create positive impact of our existence and operations. This has widely been applauded and re ected with true commitment of creating a sustainable socio-economic growth. Company has focused on community wellbeing in the times of pandemic by helping the government to handle the pandemic situation by providing necessary infrastructure to the local government authorities.

The company although did not generate pro ts in the previous two nancial years and the Company continues to report losses and is operating on working capital borrowed from banks and intercorporate loans and advances from the holding company. However, the company has spent Rs. 3.14 Lakhs during the nancial year.

Furthermore, as required by Section 135 of the Companies Act, 2013 and the rules made hereunder, additional information on the policy and implementation of CSR activities by your Company during the year are provided in Annexure 5 to this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As per requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA) the Company has implemented the policy and framework. Moreover, the Companys policy is all gender inclusive, our process ensures complete anonymity and con dentiality to the parties.

Internal Committees (IC) have been constituted. While maintaining the highest governance norms, the IC has appointed internal members and an external member who has extensive experience in the eld. The IC meet on quarterly basis to discuss the matters on policy awareness, best practices, judicial trends, etc. During, the year, IC has been also trained on nuances of the SHWWA. The ICs role is to consider and resolve the complaints reported on sexual harassment at workplace.

During the year, there are no complaint with allegations of sexual harassment was received by the Company.

To build awareness in this area, the Company has been publishing newsletter, emailers, posters, conducting online training module and IBegin-induction face to face training for new joining employees. Besides the refresher virtual training programmes are conducted in the organisation on a continuous basis for employees, consultants, contractual employees and permanent/contractual workers in regional languages. The IC has also conducted informal sessions to check the pulse at the grassroot levels.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 in relation to nancial statements (together with the notes to

such nancial statements) for the year 2020-21, the Board of Directors report that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along

with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of a airs of the Company at the end of the nancial year and of the loss of the Company for that period;

(iii) the Directors have taken proper and su cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the nancial statements on a going concern basis;

(v) the Directors have laid down internal nancial controls to be followed by the Company commensurate with the size and nature of its business and the complexity of its operations and that such internal nancial controls are adequate and are operating e ectively.

(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable

laws and such systems are adequate and is operating e ectively.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary, Joint venture or Associate Company during the year under review.

MAINTENANCE OF COST RECORDS

The_Central_Government_of_India_has_not_specified_the_maintenance_of_cost_records_under_sub-section_(1)_

. of_Section_148_of_the_Act_for_any_of_the_products_of_the_Company

REPORTING OF FRAUD BY AUDITORS

During the year under review, neither the statutory auditors nor the secretarial auditor have reported to the Audit Committee or the Board, under section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its o cers or employees, the details of which would need to be mentioned in this Report.

DISCLOSURE OF COMPLIANCE OF SECRETARIAL STANDARDS:

The relevant Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) related to the Board Meetings and General Meeting have been complied with by the Company.

ACKNOWLEDGMENT

Your Directors place on record their sincere appreciation for the support from employees, shareholders, customers, suppliers, banks, auditors, government authorities and other business associates.

By Order of the Board
7 May 2021 Akshara B. L.
Bengaluru Company Secretary